Hyundai and Kia have a lot on their minds now

Posted on Tuesday, 6 November 2012 , 11:11:41 byEmil

Filed under asiankiahyundaimpgepaHyundaiAsianKIA

Hyundai and Kia have a lot on their minds now


Yup, Hyundai and Kia are in big trouble. As you know, the Environmental Protection Agency found out that the two companies announced inflated gas-mileage ratings and so, the two will have to pay a lot for the 900.000 cars sold on the North American market. To be more precise, an estimated figure of the costs reaches $362 million. Well, this must sting. If you think this is all, you could not be more wrong. According to market researcher Interbrand Corp. this costs might be even higher and so, both Hyundai and Kia should get ready to pay their dues. Different analysts think the brand value of the two is going to be damaged, and damaged bad. This does not just mean financial forecasts, but also the public image and reputation, which at the moment start to go bad.



Now, Koreans from Hyundai are ranked 53 among the top 100 global brands and have a $7.5 billion brand value. Kia on the other had is ranked 87 with a brand value of $4.1 billion. These figures were offered by Interbrand Corp.  After clients found out the real mpg, a lot of modifications took place. Their stock prices dropped 7.2 % to 199.500 won in case of Hyundai and 6.9 % to 56.300 won with Kia. This situation makes the stock price more sensitive than the brand value. Unfortunately, the stronger the brand is, the resilient it is. The two carmakers, Hyundai Motor America and Moa Motors America will adjust the fuel economy ratings for free for around 900.000 vehicles, which represent 35 % of 2011-2013 model years vehicles sold until the 31st of October this year. The will modify the ratings by approximately 3 $ from 27 mpg to 26 mpg. This changes might win back some of the credit, but still the situation is very delicate.